Devon Energy Monetizes Access Pipeline for CAD $1.4 Billion (USD $1.1 Billion); Additional CAD $150 Million (USD $120 Million...
July 14 2016 - 6:00AM
Business Wire
Devon Energy Corp. (NYSE: DVN) today announced that it has
entered into a definitive agreement to sell its 50 percent
ownership interest in Access Pipeline to Wolf Midstream Inc., a
portfolio company of Canada Pension Plan Investment Board, for CAD
$1.4 billion, or USD $1.1 billion, using current exchange rates.
The agreement also includes the potential for an incremental CAD
$150 million payment with the sanctioning and development of a new
thermal-oil project on Devon’s Pike lease in Alberta, Canada.
“With the highly-accretive sale of Access, Devon’s divestiture
program is now complete with proceeds totaling $3.2 billion,
surpassing the top end of our $2 billion to $3 billion guidance
range,” said Dave Hager, president and CEO. “Furthermore, the
divestiture proceeds significantly strengthen our investment-grade
balance sheet and position us to further accelerate investment in
our best-in-class U.S. resource plays, led by the STACK and
Delaware Basin.”
Under terms of the sale agreement, Devon’s thermal-oil acreage
is dedicated to Access Pipeline for an initial term of 25 years. A
market-based toll will be applied to production from the Company’s
three Jackfish projects, which are fully operational. As a result,
Devon expects its lease operating expense at the Jackfish complex
to increase by approximately USD $100 million on an annualized
basis.
The agreement also includes the potential for the Access
Pipeline toll to be reduced by as much as 30 percent with the
development of new thermal-oil projects in the future. The
Company’s next potential project is the first phase of Pike, which
is located immediately adjacent to the Jackfish complex. Devon is
the operator of this joint venture leasehold with a 50 percent
working interest. Front-end engineering and design work at the
first phase of Pike is complete, but the project has not been
sanctioned.
The transaction is subject to regulatory approvals along with
customary terms and conditions. Closing is expected in the third
quarter of 2016. Bennett Jones LLP acted as legal advisor to
Devon.
About Devon Energy
Devon Energy is a leading independent energy company engaged in
finding and producing oil and natural gas. Based in Oklahoma City
and included in the S&P 500, Devon operates in several of the
most prolific oil and natural gas plays in the U.S. and Canada with
an emphasis on a balanced portfolio. The Company is the
second-largest oil producer among North American onshore
independents. For more information, please visit
www.devonenergy.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Such statements are
subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of the Company. These risks
include, but are not limited to: the failure to consummate the
transaction due to unsatisfied closing conditions or otherwise;
whether the potential incremental payment in the transaction is
earned and paid; the timing, amount of proceeds and actual closing
of this transaction and the Company’s other pending divestitures;
and the other risks identified in the Company’s Annual Report on
Form 10-K and its other filings with the Securities and Exchange
Commission. Investors are cautioned that any such statements are
not guarantees of future performance and that actual results or
developments may differ materially from those projected in the
forward-looking statements. The forward-looking statements in this
press release are made as of the date hereof, and the Company does
not undertake any obligation to update the forward-looking
statements as a result of new information, future events or
otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20160714005212/en/
Devon Energy CorporationInvestor ContactsHoward Thill,
405-552-3693Scott Coody, 405-552-4735Chris Carr,
405-228-2496Media ContactJohn Porretto, 405-228-7506
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